(3) Sales Margin Volume Variance (SMVV) : This variance arises because of the difference between the budgeted and actual quantities of each product both evaluated at budgeted margin.

SMVV = Budgeted margin per unit (Actual units – Budgeted units) This can be further sub-divided into the following two variances:

(4) Sales Margin Quantity Variance (SMQV): This variance arises because of the difference between the budgeted total quantity and the actual total quantity and is ascertained by multiplying this difference by budgeted margin per unit of budgeted mix.

(5) Sales Margin Mix Variance (SMMV): This variance arises because of the change in the quantities of actual sales mix from budgeted sale mix and can be computed as below: